Operating loss just around the corner for Korean Big 3 carriers

Korean major carriers couldn't avoid operating losses in the first quarter. In the mid-term, however, they are expecting to return to profitability this year.

Among Korean securities companies, the three majors anticipated that bulk of Korean carriers will record negative earnings.

In the case of Hanjin Shipping, the company may take in KRW 2.4907 trillion in revenue, but suffer KRW 22.6 billion in operating losses.

If that happens, the carrier will mark a consecutive deficit continuing KRW 59.8 billion in operating losses in 4Q 2012.

Hyundai Merchant Marine (HMM) and STX Pan Ocean are in the same situation. HMM may mark KRW 1.9329 trillion in revenue and KRW 46.3 billion in operating losses.

STX Pan Ocean also expects to see KRW 1.3961 trillion in revenue and KRW - 21.8 billion in operating losses.

Although under this dark cloud, some shipping carriers and related companies are doing better owing to the deficit gap being smaller than last year.

The major three carriers each recorded KRW 218.2 billion, 128.5 billion, and 216.9 billion in operating losses in the first quarter of 2012.

The securities companies judged the deficit will be 'good defense' compared to the huge depression in 1Q fettering to the carriers' total annual financial results.

Meanwhile, the securities companies put up brighter predictions that the carriers could turn back into the black in the second or third quarter.

The freight rates on Asia-Europe and Asia-America have constantly increased since March. Recently the Baltic Dry Index (BDI) is showing a downward trend, but the figure is 20% higher than the end of last year.

One industry observer said, "Although there is much anxiety, like for continued ship delivery, the industry expects the freight rate should increase in May and a better mood will last for a while." < 김보람 기자 brkim@ksg.co.kr >